UPDATE 1-Private equity readies German sales as market lifts
* Favorable financing conditions bolster deals
* More large-scale deals expected in Germany in 2013
* Sale of Ista, Scandlines, CeramTec launching shortly
By Arno Schuetze
FRANKFURT, Feb 19 (Reuters) - Buyout firms are putting a raft of German assets on the block as recovering markets improve the availability of bank financing and create the most attractive exit prices for years.
Among companies looking for new owners are metering company Ista, ferry group Scandlines, industrial ceramics group Ceramtec and logistics group Unifeeder.
"Everyone wants to invest in Germany and the Nordics, that's why 2012 has seen already seen record-breaking prices in M&A deals," a Germany-based partner of a big U.S.-based private equity group said, adding he expects the development to continue this year.
In the absence of high-yielding investment opportunities, the euro zone's largest and most resilient economy is witnessing high interest for some of the names in private equity portfolios, bankers said.
Private equity managers - many of whom will gather at the annual SuperReturn conference in Berlin next week - need to divest assets to show they can make money for their investors and raise new funds.
Some of the assets currently being put on the block were bought in boom times when capital and debt to finance acquisitions were easily available.
Bankers say that financing markets are now almost back to pre-crisis levels.
Private equity managers acknowledged it was hard during the financial crisis to get a return on highly-leveraged deals struck during a time of easy finance and sometimes the assets were at risk of default.
But that perception has started to change.
"What errors? Leverage was high in 2006/07 deals, but there haven't been a lot of defaults," one private equity manager said.
Turning to the present day, he acknowledged that while some parts of the market, such as bond-driven deals, were becoming over-heated, the same was not true of the market as a whole.
In Germany, bankers said they are expecting to see many more large deals this year and a level of medium-sized transactions that would be stable at least.
Among bigger deals are the sale of energy-metering firm Ista and ferry group Scandlines, with information packages due to be sent out in the next couple of days.
Charterhouse and CVC are expected to get up to 3 billion euros ($4 billion) for Ista, while 3i and Allianz Capital Partners could pull in up to 1.4 billion for Scandlines.
Goldman Sachs and KKR are also preparing the flotation of fork lift truck maker Kion, which is likely to be valued at more than 2 billion euros and could take place after the summer break, sources close to the investors said.
In two transactions that have caught the attention of big private equity investors, U.S.-based chemicals group Rockwood has put German assets Sachtleben and CeramTec on the block, sources close to the deal said.
While large transactions are gaining pace, bankers continue to work on a flurry of medium-sized deals in Germany.
Montagu has hired UBS to explore options for internet service provider Host Europe, and with the help of Hawkpoint is seeking bidders for logistics group Unifeeder, each deal potentially worth more than 400 million euros.
Star Capital also has two disposals of up to 200 million euros on its plate.
It is expecting final bids for manufacturer Blohm + Voss Oil Tools before Easter in a deal organised by Macquarie and will shortly send out information on retirement home operator Alloheim, sources close to the transaction said.
Taros Capital has asked for bids for its car parts maker Carcoustics by mid-March. In the sale, which is being run by Macquarie, the investor is hoping to attract offers of around 130 million euros, sources close to the deal said.
Private equity investor bluO has hired Rothschild to advise on the sale of specialty chemicals group AlzChem, while family-owned car parts groups Scherer&Trier and PV Automotive have also hired banks for a strategic review which is likely to result in a sale to private equity investors, sources familiar with the situation said.
The private equity investors, banks and companies declined to comment, except for Star Capital, Taros Capital, and Scherer&Trier, which were not immediately available for comment.
- U.S. Mega Millions lottery up to $400 million, 2nd-biggest ever
- Uruguay becomes first country to legalize marijuana trade
- Pope Francis named Time's Person of the Year
- Thousands of South Africans line up to see Mandela lie in state |
- China bitcoin arbitrage ends as traders work around capital controls